Can you make money from copytrading in Crypto?
Want to make money in the crypto world without having to bother analyzing charts continuously? Get to know Copy Trading! Through this method, we can copy transactions made by pro traders, so that the opportunity to make a profit can increase without needing to be a crypto expert. Let's review further regarding copy trading, how it works, advantages and disadvantages and the most suitable platform for copy trading!
What is Copy Trading?
Copy trading is a method where you can copy transactions in real time carried out by professional or experienced traders. In other words, every time the trader we choose makes a transaction, either buying or selling tokens, our account will also automatically do the same. This concept was first popular in the forex market, but has now developed rapidly, including in cryptocurrency.
In an investment market, especially one as fast and complex as cryptocurrency, knowing the right time to enter and exit can be very challenging. Copy trading is a brilliant solution that eliminates the need to make all those decisions alone, especially for beginners who have yet to master the nuances of the market. This method simplifies the investment process by utilizing the skills and experience of pro traders, so that traders can save time that is usually spent studying and analyzing the market all the time.
How Copy Trading Works
Just as the name suggests, copy trading allows you to essentially copy the actions taken by pro or expert traders in real-time. Here is how copy trading works in general:
Choose a Platform: First, you need to register on a platform that provides trusted copy trading features. Make sure the platform has a good reputation and offers a wide choice of traders to follow, such as Binance.
Search and Select a Trader: After registering, the next step is to look for a professional trader that we want to follow. we can see their profile, track record, trading strategy, and the returns they produce. Choose traders who fit the criteria, and it's best to diversify, don't focus on just 1 trader.
Determine the Investment Amount: After selecting a trader, determine how much money we want to allocate to copy trade their transactions. Some platforms allow us to divide fund allocations among several traders at once for diversification.
Activate Copy Trading: After setting the investment amount, activate feature copy trading Of platform. With this, every transaction carried out by trader that we follow will be automatically copied to your account. For example, if trader If you buy Bitcoin, your account will also buy Bitcoin in the amount and fund allocation that was determined at the beginning.
Monitor and Adjust: Even though copy trading allows us to copy other traders' transactions, it is still important to monitor performance, drawdown and carry out regular evaluations.
Benefits of Copy Trading
Copy Trading offers many advantages, some of which are:
Learn from Pro Traders: With copy trading, we can directly copy the trading styles of those who are already pros. It's like getting a shortcut to learn effective trading tricks without having to try and error yourself. So, we can immediately apply strategies that have been proven successful.
Beginner-Friendly: No need to worry about where to start, copy trading is very friendly for those of us who are just starting out. Every position taken by the pro trader will automatically be copied to the copy trade account.
Save Time: With copy trading, we don't need to always sit in front of the screen to monitor the market and in-depth analysis which usually takes hours. Additionally, this can help us avoid emotional and impulsive trading which can increase risk.
Minimal Risk: Following traders who are already pros also helps in reducing the risk compared to jumping straight in without any prior knowledge. Additionally, many copy trading platforms offer the option to follow multiple traders at once. This diversification can help minimize risk, because the poor performance of one trader can be offset by the good performance of other traders.
Losses of Copy Trading
Although copy trading offers many advantages, such as convenience and access to the expertise of pro traders, this method is not free from drawbacks. Some risks include:
Choosing the Wrong Trader: Choosing the wrong trader in copy trading can have serious consequences. Imagine, when we decide to follow someone, hoping to get good results, but it turns out their strategy does not match expectations. Therefore, it is important to check their track record, trading style, and reviews from other users. Don't just be tempted by big profits and make sure that their trading strategy suits your risk tolerance.
Extra Fees: Some copy trading platforms may charge additional fees for using their services. This could be a subscription fee or a percentage of the profits we make.
Less Control: With copy trading, you have less control over trading decisions because all decisions are made by the trader you follow. This can be a problem if their preferences and risk tolerance do not fully match what we expect
Scam Risk: Copy trading is also not free from the risk of scams, where there are traders or platforms that may be dishonest or manipulative. Always do thorough research and choose reputable platforms and traders to avoid this risk.
Why Choose Binance for Copy Trading?
To overcome some of the weaknesses of copy trading, you can use a platform that has been proven to be reliable and trustworthy, such as Binance. Binance offers a wide selection of lead traders with a variety of trading strategies and criteria, so we can find the one that best suits our style and risk tolerance. Transparency is also a major plus, with lead trader performance data (ROI, PNL, etc.) available for analysis. Binance also provides advanced features such as “fixed amount” and “fixed ratio” modes. we can also diversify up to 20 different portfolios.
For those of us who are pros, Binance offers the opportunity to become a lead trader. As a lead trader, we can get up to 30% profit share from copy trader profits and 10% commission from trading fees.
How to Copy Trading on Binance?
It's also easy! Here are the steps to start copy trading on Binance:
Register and Verify Account: Make sure you have a Binance account.
Deposit Funds: Deposit funds into your Binance account.
Choose Platform Copy Trading: Access features copy trading via the menu section on platform Binance.
Search and Select Lead Traders: Select lead traders from the list provided by viewing their performance and statistics.
Determine the Investment Amount: Set the amount of funds you want to allocate for copy trading.
Enable Copy Trading: Activate the copy trading feature to start copying the transactions of the lead trader you choose.
Monitor and Adjust: Monitor performance and adjust your portfolio as needed.
So, if you are looking for a way to make money in the crypto world without having to analyze charts all the time, copy trading on Binance could be the right choice. Start by following the steps explained. However, as discussed, it is important to always do your research and choose the right platform and trader to minimize risks.
Disclaimer: Investing and trading crypto assets is a high-risk activity. All information presented here is for educational purposes and is not a recommendation or invitation to buy any asset.
